Not "is short-term rental legal here" — it's legal almost everywhere outside the capital. The real question is whether the specific unit you're buying holds the right paper.
We've watched buyers fall in love with a unit, run the yield math, and only then ask whether it's actually allowed to operate as a short-term rental. That question has to come first, because in Panama City it has a real legal answer — and getting it wrong doesn't mean a slap on the wrist.
Under Law 80 of 2012 and Executive Decree 82 of 2008, any rental under 45 days inside the Panama District requires a tourism accommodation permit from the ATP. Operate without one and you're running unlicensed hospitality — with fines ranging from $5,000 to $50,000, not the kind of number that disappears into a rounding error.
The capital-district rule is also the reason it doesn't apply nationwide: Boquete, Playa Venao, Bocas del Toro and El Valle carry no minimum-night restriction and need no ATP permit at all — see our coverage of the pending reform bill for where that framework might be headed next.
Our own portfolio includes ATP-licensed projects like Generation Tower and The Hub, built with the permit as part of the design, not retrofitted after the fact.
A designated exception inside the capital district, with its own registration path.
Older permits that predate current zoning, verifiable at the registry — but only if they're still active and attached to the specific unit, not just the building's name.
Once the permit question is settled, the operating layer is straightforward: an operating notice from the municipality (roughly $100–300/year), DGI tax registration with monthly ITBMS filings (10% on tourism lodging), optionally a Panamanian corporation to hold the asset ($800–1,500 to incorporate), and a certified property manager — typically 18–22% of gross — if you're not living on-site to run it yourself. Done right, countryside STR in Panama is arguably the most accessible in the hemisphere, and city STR works exactly as intended in the buildings actually built for it.
An ATP permit for any rental under 45 days within the Panama District — this post covers the legal structure for operating STR professionally.
Outside the Panama District — interior and coastal markets like Boquete, Venao, Bocas and Valle de Antón have no equivalent ATP requirement.